Friday, May 18, 2012

There are consumer protections in place for credit cards, student loans, car deals, even loans to buy furniture. But 4 On Your Side discovered New Mexico has holes in consumer protections when it comes to buying real estate, leaving the poor to be taken advantage of.

Miguel Roman bought land in 1982 on the Pajarito Mesa in Bernalillo County where there is no running water, no power, and no utility connections. He didn’t qualify for a mortgage, so he bought the land through a real estate contract(1). "I wanted some freedom out of the city,” Roman said.

A few years after Roman moved in, he discovered he had been duped. The person who sold him the land did not own it. "By the time I owned this property, I paid double," Roman said. To keep the land, Roman paid for the lot twice; first to a conman, then to the legal owner of the lot.

Sandra Bustillos and her husband found themselves in the same situation a year after buying their land through a real estate contract. Bustillos and her family worked extra hours to pay off their property in full, only to find out that they were paying the money to someone who didn’t even own the land.

Bustillos bought the land through a contract from Tomasita Atencio. But Atencio had been paying for the same parcel of land from Charles Wright. Atencio sold property that wasn’t even hers.

Attorneys with the Center on Law and Poverty are now trying to figure out if Wright was in the plot. Even though Bustillos finished her payments, Wright didn’t recognize the money. He now forces Bustillos to pay for land she thought she already owned.

"It's a very informal, shadowy process," said Craig Acorn, managing attorney at the NM Center on Law and Poverty. "Terrible things are happening to people, the fact of the matter is, (real estate contracts) are being used as a predatory instrument," said Kelsey Heilman, staff attorney for the NM Center on Law and Poverty.

Acorn and Heilman said these kinds of shady transactions happen all the time through real estate contracts. In an interview with 4 On Your Side, the attorneys said they have heard stories where after one missed payment, the seller repossess the property and forces the buyer to start a new contract, losing out on all money already paid. In some cases the interest rates are astronomical or never disclosed. "There is no law in New Mexico that provides protection for those folks," Acorn said.

(1) This purchasing arrangement involving the use of a real estate contract in New Mexico to pay off deferred payments to the seller of real estate is, in other parts of the country, referred to as a contract for deed, agreement for deed, land contract, and installment sale contract (among possibly other similarly-worded references, depending on the part of the country), and are not, in any material way, significantly different than lease-purchase and rent-to-own arrangements.

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